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Smoke taint or smoke screen?

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One of the largest players in California’s wine industry has rejected $4 million worth of contracted grapes by regional growers in the wake of Southern Oregon’s smoke-choked summer.

Copper Cane, of Rutherford, California, owned by Joe Wagner, had signed long-term contracts to purchase primarily pinot noir grapes in the past three years. Hundreds of acres are involved, and in some cases, growers planted vines with lucrative contracts in mind.

Citing widespread wildfires in Northern California and Southern Oregon, Copper Cane conducted tests in September, then emailed rejection letters to large and small growers in the region.

“The wines produced from grapes sampled from your vineyard were found by the winery to fail our sensory evaluation,” the Napa Valley winery wrote. “Due to the failure of your wines to pass our wine sensory evaluation for the presence of ‘smoke taint’ characters, the winery is hereby rejecting all of the grapes from your vineyard for the 2018 harvest year.”

Southern Oregon vintners are crying foul for a number of reasons, including the testing procedure and the actual laboratory results.

Rogue Valley Vintners President Ross Allen, owner of 2Hawk Vineyard & Winery, isn’t among the pinot growers who stand to lose substantial income. Smoky skies have been commonplace in recent summers, but with the exception of 2013, smoke taint hasn’t been an issue with local vintages. Allen wonders why smoke has become an issue to outside wineries this year.

“Obviously, all of us in the valley had to deal with another smoky summer,” Allen said. “But in comparison, we had smoke in 2017 as well; it’s just that duration periods were a little different.”

The smoke’s duration, intensity and particulate size, wineries’ proximity to the wildfire, and whether the smoke is from grass, woodlands or heavy-timber fires all determine whether smoke has an impact on grapes, he said.

“The straight answer to the point is yes, smoke can affect grapes,” Allen said. “But it is dependent on skin thickness and variety.”

Grapes tested by the usual laboratories throughout the region have shown remarkably little indication of smoke taint.

“Even though we had a longer smoke period in 2018, a lot of it occurred pre-veraison before we got color, where the fruit is not susceptible,” Allen said. “Post veraison, the intensity levels were lighter in some areas and heavier in others, but across the Rogue Valley for most varieties we dodged a bullet.”

Copper Cane fermented its samples and then turned over the wine to Enartis-Vinquiry Laboratory, seeking compounds associated with smoke taint such as guaiacol and 4-methylguaiacol, present in wood smoke resulting from the thermal decomposition of lignin.

Copper Cane’s corporate offices are in St. Helena, California. In response to a telephone call seeking comment from the company, a representative asked for questions to be submitted by email.

In response to six email questions, Jim Blumling, operations vice president, simply stated: “We are working directly with our growers at this time.”

A dozen growers, feeling more worked over than worked with, gathered with their lawyers over the weekend, leading one participant to suggest a hefty lawsuit is in the works.

Local vintners point out the abundance of grapes that have been harvested in recent years and suggested the smoke taint scenario is merely a ploy to reduce inventory.

Relying on ETS Laboratories, like Enartis-Vinquiry Laboratory, located in St. Helena, Rogue Valley growers have received normal results.

“Last year, (Copper Cane) accepted all of our fruit,” one contract grower said. “The smoke was lower (in 2017) and closer. There was ash on cars and in the air, the test numbers were higher. The numbers are lower this year and we’ve had high elevation smoke, it hasn’t been on the ground.”

A to Z Wineworks in Newberg continues to accept fruit in similar locations that Copper Cane rejected.

John Pratt of Celestina Vineyard off Dark Hollow Road is president of the Oregon Wine Growers Association. His grapes aren’t sold to California wineries, but he eyes the flurry of rejections with suspicion.

“What’s happening now is wineries are using smoke taint as an excuse, because they can cancel these contracts. Right now there is fruit available on the market for about half the price of what these contracts were for. So they cancel these contracts and then they can go out and fill their need for fruit at much less. I don’t think it’s a smoke issue, I think it’s really that there is sort of a glut on the market right now.”

Willamette Valley yield has soared from two to two-and-half tons per acre to as much as four tons without losing quality, Pratt said.

“So there’s a lot more fruit out there now, and with this glut on the market there is an imbalance between supply and demand,” he said. “So some wineries are taking advantage of that and canceling contracts for bogus reasons, and then going back out buying fruit for much less than what their original contracts were.”

Pratt referenced one grower near Jacksonville who had 300 tons worth $600,000 rejected.

“He probably has expenses of $400,000 to $500,000 in getting that fruit ready to sell,” Pratt said. “All those expenses, all that time in irrigating, in pruning, in leaf pulling, in cluster thinning all that work he’s done is all for naught, because now he can’t sell that fruit.”

It’s not merely a matter of selling to another winery because of an abundant harvest and crush schedules filling tank and barrel space.

“It’s not like he can go somewhere else right now and say, ‘Oh, I’ve this extra fruit’ and find another buyer. He can’t find another buyer, wineries are all at capacity now; it’s just going to be wasted.”

In the rejection notice from Copper Cane, fruit supply director Matthew Heil recommended growers turn to crop insurance programs to mitigate risk.

While some of the large growers such as Del Rio Vineyards and Naumes Family Vineyards have insurance to mitigate crop losses, others may have to rely on U.S. Department of Agriculture programs.

Michael Moore of Quail Run Vineyards said his family has never opted for crop insurance in more than 30 years of farming in Jackson County. Pinot noir accounts for just 5 percent of the tonnage he manages, but its bottom line contribution is significant.

“It’s a complete loss for us,” he said. “It’s a huge portion of our profit, so it really hurts.”

The juice gets murkier when it comes to Wagner’s wine dealings with Oregon.

Wagner sold his Meiomi Wines to Constellation Brand Inc. for $315 million three years ago. But he wasn’t through with pinot.

This summer, Wagner’s appropriation of Oregon AVAs (American Viticultural Areas) drew the ire of Oregon legislators and the Oregon Winegrowers Association, as well as attention from Oregon Liquor Control Commission and, in turn, the formulation division of the Alcohol and Tobacco Tax and Trade Bureau.

Rep. David Gomberg (D-Lincoln City) has asked the Oregon Justice Department to investigate Wagner’s branding of a California-made wine, the 2017 Willametter Journal Pinot Noir. Gomberg takes exception with the label’s text referencing “the Willamette region of Oregon’s coastal range.”

The wine doesn’t qualify as a Willamette Valley appellation and the grapes came from other parts of Oregon. The legislator bought a bottle of Elouan Pinot Noir at a nearby Safeway and took note of the “Oregon Coast” designation on the wine’s back label. He then ordered a $29.99 bottle of Willametter Journal online on Aug. 6 from Total Wine in Sacramento, California.

While Wagner dismissed the nuisances in an interview with the San Francisco Chronicle last month, Gomberg thought otherwise.

In his complaint to the Justice Department, he alleges that labels on both the Willametter Journal and Elouan may have violated state and federal regulations by falsely advertising the grapes’ place of origin the Willamette Valley, Umpqua Valley and Rogue Valley.

“These Oregon geographic designations are well-known for wine-grape quality. Listing them all appears to be deceptive as there is no delineation from which designation the wine grapes or wine originated, or if from all, in what percentages,” Gomberg wrote.

“There are several geographic issues with this label, but I am more concerned about a deeper deception. The wine doesn’t taste like a Pinot Noir grown and made in the Willamette Valley.”

He noted online reviews confirmed his points.

“The Oregon wine industry has complained to the federal government regarding these label issues, but that does not address the harm to Oregon consumers and (trade infringement) violations.”

Reach reporter Greg Stiles at 541-776-4463 or gstiles@rosebudmedia.com. Follow him on Twitter at @GregMTBusiness or www.facebook.com/greg.stiles.31.

Grape harvest is underway at a vineyard near Griffin Creek Elementary School. Mail Tribune / Jamie Lusch